Rent vs. Buy…Trulia says Buy!

Renting vs. Buying can be a tough and very important decision many consumers face in today’s economy, especially when choosing to reside in the Fairfield area which can be an expensive investment either way. There are many questions to ask when making this decision:

  • Do I plan to live here longer than 2 years?
  • What will my work commute be like?
  • If I don’t find the perfect house, is renting financially-wise until the right one comes along?
  • Do I want to rely on a good landlord to maintain the property and fix/replace broken items?
  • If I can get a mortgage for the same price as the rent, doesn’t it make more sense to buy?

According to Trulia’s Winter 2014 Rent vs. Buy Report, buying a home is now 38% cheaper than renting. “Homeownership remains cheaper than renting nationally and in all of the 100 largest areas. Rising mortgage rates and home prices have narrowed the gap over the past year, though rates have recently dropped and price gains are slowing. Now, at a 3 year fixed rate of 4.5%, buying is 38% cheaper than renting nationally, versus being 44% cheaper one year ago.” (AP)

The chart below shows a cost comparison for a renter and a homeowner over a seven year period which is a great visual for someone facing the tough decision to rent or buy.  The renter starts out paying $800 per month with annual increases of 5% .  Although the prices in Fairfield County are higher, the homeowner in the below chart purchases a home for $110,000 and pays a monthly mortgage of $1,000.  After 6 years, the homeowner’s payment is lower than the renter’s monthly payment.  With the tax savings of homeownership, the homeowner’s payment is less than the rental payment after 3 years.

ginnie-mae-buy-vs-rent-chart

                                                                                                                                                            *National Association of Realtors, March 2014*

 As valued consumers, we all have an important goal in common:  save money and invest wisely.  If you want to not only save money but have the luxury of owning your very own home, buying would be the better choice…imagine what you could be saving…

 

 

 

 

 

 

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Shoshana Snyder

Shoshana Snyder

shoshana@snyderpritchardhomes.com
203.321.3502

Sarah Pritchard

Sarah Pritchard

sarah@snyderpritchardhomes.com
203.414.5571

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